Recently, Carlos Tavares, CEO of Stellantis Group, put forward an important view on the electric vehicle industry: The EU's move to impose tariffs on electric vehicles produced in China may accelerate the closure of factories of European automakers.

Tavares believes that imposing tariffs will prompt Chinese automakers to establish factories in Europe to avoid tariff barriers. While this strategy can bring certain job opportunities and economic activities to Europe, it will also lead to overcapacity, exacerbating the difficulties faced by European local manufacturing industries. He pointed out that tariffs are an effective communication tool, but their side effects cannot be ignored, especially as European manufacturing industries are already facing many challenges.

Photo from Leapmotor

Currently, governments of many European countries, including Italy, are actively attracting Chinese automakers to invest and build factories locally, which can help these countries avoid the impact of tariffs to a certain extent. For example, BYD is building an assembly plant in Hungary, which not only helps BYD avoid potential tariff risks but also has a positive impact on the local economy of Hungary.

However, Tavares also pointed out that Chinese automakers are unlikely to choose to build factories in countries with high energy costs such as Germany, France, or Italy. He specifically mentioned that Italy's high energy costs, which are twice as high as those of Stellantis's production facilities in Spain, are a major disadvantage for the Italian automotive industry.

Belgian cabinet official Anout analyzed the issue from an economist's perspective. He believes that the protectionist approach of imposing tariffs on Chinese electric vehicles by the EU may lead to laziness among European local enterprises. While this may benefit European industries in the short term, a lack of competition in the market environment will weaken the competitiveness of European enterprises in the long run.

Electric Car Channel believes that the core lies in finding a balance between protecting local industries and promoting international competition. The European automotive industry is facing the challenge of transformation, and how to maintain competitiveness in the new global economic landscape will be a problem that European automakers must face. With the continuous expansion of the electric vehicle market and the acceleration of technological innovation, the European automotive industry needs a more open and flexible strategy to meet future challenges.

The stronger the development of new energy vehicles of independent brands, the stricter the corresponding export restrictions will be. Last March, Germany and the EU reached an agreement on the "internal combustion engine ban" negotiations. The EU ultimately decided to withdraw the previous ban on the sale of fuel vehicles and instead allow the use of new zero-emission synthetic fuel vehicles after 2035. It is probably hoped that by exerting pressure on domestic independent brands to go abroad, local brands will be protected and time will be gained for the construction of the electrification industry.

At present, the focus and dominance of new energy vehicles are in the hands of domestic independent brands. Joint-venture traditional brands are slow to transform and skeptical about electrification. The lack of relevant industrial chains and R&D experience for electric vehicles locally makes it difficult for them. Corresponding new platforms and new products will have to be delayed until 2026 or even further into the future, raising concerns about the transformation of traditional brands.

With the efforts of domestic brands in the new energy race, the joint venture model of exchanging markets for technology has come to an end, and the era of independent new energy has arrived. In recent years, in order to accelerate the electrification process, traditional automakers have also tried to cooperate with domestic new energy brands to carry out various "reverse joint ventures," including Leapmotor and Stellantis, as well as Volkswagen and Xpeng. Perhaps, traditional automakers who want to make progress can also consider the joint venture model of years past.

Source: Leikeji